Fry-Day For Markets!

Author

Yash Upadhyaya
April 12, 2024

Tale of the Tape 

Good evening everyone. Happy Friday! 🍻

Nifty and Sensex ended down -1% each after a higher-than-expected US inflation data dashed hopes of an early Fed rate cut. Midcaps (-0.6%) and Smallcaps (-0.4%) followed in lockstep. The advance-decline ratio was in favour of the bears (3:2). 📉

All sectors ended in the red. Pharma (-1.7%), PSU Banks (-1.3%), and Oil & Gas (-1.2%) stocks got beat up the most. 🚨

India’s stock market growth story is INSANE. Read our top story below on what stocks will benefit from the retail investor boom. 🚀

Goldman Sachs is bullish on Neuland Labs (+8%) and Syngene (+2%), but bearish on Laurus Labs (-3%). More details below on the brokerage’s investment rationale. 💊

Sun Pharma (-4%) was the top Nifty loser after the USFDA hinted at action against its Dadra facility. 👎

Bharti Hexacom made a strong market debut, closing +43% above its IPO price. 🤑

Vodafone-Idea (+2%) Rs 18k cr FPO price band has been fixed at Rs 10 p/sh - Rs 11 p/sh. Reports say GQG Partners & SBI Mutual Fund may participate. 💰

Manorama Industries rallied +7% intraday after commissioning its new fractionation plant. 🏭

Metropolis Healthcare (+2%) hit a 52-week-high after becoming debt-free and reporting a strong Q4 biz update. 📊

CAMS rallied +4% intraday after getting RBI approval to act as an online payments aggregator. ✅

Here are the closing prints: 

Nifty

22,519

-1%

Sensex

74,245

-1%

Bank Nifty

48,565

-0.9%

Markets
Maal Laav!

India’s stock market is BOOMING. Nifty and Sensex hit all-time highs this week, with the latter crossing the 75K mark for the first time! The combined market cap of all BSE-listed firms jumped from Rs 3 lakh cr to Rs 4 lakh cr in just NINE months. To put that in context, it took nearly 7 years to go from Rs 1 lakh cr to Rs 2 lakh cr. 🚀

Higher retail investor participation, more disposable income & a strong bull cycle after Covid have all helped. But what if I told you that you could profit from this by investing in the “right” company? 😎

1) Intermediaries: Some of the best opportunities come from companies that help grease the wheels. CDSL, which helps digitally safeguard our stocks, has been KILLING it; the stock has doubled in the last year. Another option is CAMS (+46% last year) which makes life easier for mutual funds by providing tech support. It’s also branching out into payments, which should widen the revenue pie for the company. 📈

2) Exchanges: The tried and tested option. ICYMI - the BSE was the best-performing NSE 500 stock in FY24. More retail investors = more money. But the F&O gambling craze is also turning out to be a huge money-maker. Yes, the stock is probably a little overpriced right now, but experts say that doesn’t matter if you’re a long-term investor. 💯

3) Brokers: All of them, both traditional and new-age tech firms, have been killing it since Covid. Listed market leader Angel One has more than DOUBLED in the last year. Yes, growth has slowed a little on a high base. But remember: despite the +7x jump in demat accounts, only 3% of India’s population invests in the stock market right now. In China, it's 13% and in the US it's 55%. There is a LOT of growth runway left. 🔥

4) Mutual Funds: Another old reliable. As more new investors come on board, let’s be real, they’ll most likely opt for mutual funds. Fun fact: if you had bought HDFC Asset Management stock last year, you would’ve made a lot more money than holding HDFC Bank! 😂

Specials

Zomato - Buy Now Or Wait For A Dip?

Zomato is on fire! The stock has nearly 4x in the past year to hit a new all-time high of Rs 194 p/sh! But, is it still a buy at current levels or should you wait for a dip?

Check out our latest video where we break down all the key updates on Zomato, covering both fundamental and technical analysis. Also, find out SEBI RAs’ views on the stock. 👇🏻

Stock

Stock Health Checkup

Drug development is the next frontier for Indian healthcare stocks. Goldman Sachs estimates a 120 - 200 bps bump in global market share for India’s CRO and CDMO markets. FYI - the pharma R&D outsourcing market is worth around $200 billion, so this is big bucks we’re talking about. 💰

A little history first though. India’s claim to fame in pharma has been through making cheap generic versions of popular drugs. Companies have never been really great at researching & formulating new ones, or even producing brand-new drugs. 💊

So what’s changing? For starters, pharma firms are investing more in capturing the value chain. FYI - there have been a BUNCH of hundred million dollar CRDMO deals in the last 3 years (Divi’s -MSD, Suven- Pfizer, Syngene-Zoetis). 🤝

A lot of key raw material production is starting up in India (see Aurobindo’s PenG production), which will help reduce our dependence on Chinese API imports. Also, the GOI’s push for a PLI pharma scheme is starting to pay off as well. Overall, a pretty bright picture.

Here are Goldman Sachs’ top winners and losers in this segment:

1) Syngene: The brokerage believes the firm is in a leading position in the CRO space and its CDMO biz is set to take off. It has initiated coverage with a target price of Rs 875 p/sh; +17% from current levels. 🤑

2) Neuland: The company’s commercialized molecules biz is set to see traction, which is good news for its CDMO vertical. Goldman Sachs sees a +37% upside from Friday's close. 💸

3) Lauras Labs: Goldman is completely bearish on this one. It sees big earning challenges, monetisation delays and unjustifiable valuations. FYI - it has a target price of Rs 350; -21% downside from current levels! 🚨

Charts

Movers and Shakers

Here’s a look at this week’s top NSE500 movers. Hindustan Zinc took the pole position after rallying +27% 🥇 Exide Industries (+24%) hit a new all-time high. GE Shipping (-8%) hit a 1-month low. Prestige Estates (-8%) snapped its 3-week gaining streak. 📉 Check out their charts below:

Get In Touch

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